Scottrade Review: One Of The Top Rated Online Stock Brokers

When looking for an online broker, it's important for you to find one that not only provides competitive pricing on your trades, but also one that suits your needs the most. Finding a good online broker can be a chore, as you need to compare the pros and cons of the broker before you open an account. Here, I'll take an in-depth look at Scottrade, one of the more popular online discount brokers in the U.S.

One of the most established online discount brokers in the U.S. is Scottrade. With this online broker, you can trade stocks at very low and competitive prices. Besides stocks, you can also trade options, ETFs, bonds and mutual funds. Scottrade has been around since 1980, and it has 500 branch offices around the U.S. It has consistently ranked tops in nationwide customer satisfaction surveys among online brokers, and has also made it to Forbes magazine as one of the best 100 companies to work for in the U.S.

In this review, I'll give you a rundown of Scottrade's main features, tell you what I like and dislike about it, and how I rate this broker.

Main Features

Takes 10 Minutes To Open A Scottrade Account Online

You can open either an Individual or Joint Brokerage Account: Choose the type of account you want to open. For the joint account, you can have up to 3 people to manage the account. With Scottrade, you can trade stocks, options, exchange traded funds (ETFs), bonds and mutual funds. Scottrade customers pay only $7 for stocks priced $1 and above (for unlimited shares), and $7 + $1.25 per contract for options trade.

Business and Trust Accounts: You can also open a business or a trust account for trading with Scottrade. Business accounts can be opened for: Corporate and LLC, Partnership or Investment Club. For trust accounts, you can choose between Regular, Keogh, PSP or MPP.

Individual Retirement Accounts: Whether you are an employee or a business owner, Scottrade also offers various types of retirement accounts including traditional, Roth, Rollover, SEP and SIMPLE IRAs.

$500 minimum deposit required to open a stock trading account.Scottrade requires you to deposit a minimum of $500 to fund your account if you trade stocks. Even though you have to pay a deposit, this $500 is low compared to other brokers which have a higher minimum deposit. For example, both Charles Schwab and E*Trade require a $1,000 minimum deposit. If you trade options with Scottrade, you need a margin account and that requires a minimum deposit of $2,000.

Trade stocks, ETFs, options, bonds And mutual funds. Not only can you trade U.S. stocks, you can also stocks from more than 20 countries, and you can also trade many of these foreign stocks online for just $7 per trade. Scottrade also has one of the largest selections of mutual funds, with almost 15,000 funds including nearly 3,000 funds with no transaction fee. All these investing options will come in handy when it comes to diversifying your investing portfolio.

No maintenance fees or account inactivity fees. Whether you are a new or experienced trader, there may come a time when you don’t trade for a while for whatever reasons, so not being charged for account inactivity fees will be a money saver in those situations.

Low pricing especially for stock trades. Scottrade customers pay only $7 for stocks priced $1 and above (for unlimited shares) and $7 + $1.25 per contract for options trade. When it comes to pricing for stocks, Scottrade has one of the lowest commissions in the industry, even compared to other discount brokers.

Things We Like About This Broker

Trade On The Go Through Your Smartphone. With the Scottrade Mobile, you can trade anywhere and anytime, whenever you like. All you need is a Scottrade account and your iPhone, Android, BlackBerry or internet-enabled mobile device to access the Mobile Trading Site. You can access your account from there, do your online trading, or just to be informed of real-time news or market research.

$0 Account Closing And Transfer Fees. Whether your account is Traditional, Roth, SEP or Rollover, you don't have to pay any set-up, annual, custodial, inactivity or closing fees with Scottrade. Scottrade will even pay your transfer fees when you switch to Scottrade from another broker (you'll be reimbursed up to $100 charged by another broker when you transfer your account with a value of $10,000 or more to Scottrade). This is a great incentive for you to start investing for yourself so that you can meet your retirement goals. Other brokers such as E*Trade, Charles Schwab and TD Ameritrade charge a fee for this.

Free Streaming Charts (With No Trade Requirements). Having free access to tick-by-tick streaming real-time quotes for stocks and options is something no trader can do without. Use their real-time charts with streaming quotes to have a detailed picture of what the market is doing and where it might be headed. You can also access real-time market news through a link within your Scottrade account so that you can be up-to-date instantly with the latest news and announcements.

Educational Information On Website. Scottrade's Knowledge Center is quite a comprehensive educational section which covers information ranging from trading basics, fundamental analysis, technical analysis, to taxes, trading topics like order types, dictionary and many more. It also has webinars which are online webcasts you can watch on various topics. If you prefer in-person events, you can also attend their live User Summits at their branches all over the US.

Highly Rated Broker Used By Self-Directed Investors. Scottrade has earned many awards for investor satisfaction in terms of trading charges and fees, and tools available on their website. In 2007 and 2008, J.D. Power and Associates ranked Scottrade "Highest in Investor Satisfaction with Self-Directed Services."

500 Branch Offices In The U.S. Scottrade has the largest branch office network in the U.S. compared to other online brokerage firms. Should you wish to receive any in-person customer support, open an account, or just to learn more about their products and services, simply locate your nearest branch location through their website.

Your Account Money Is Insured, Up To $25 Million Per Customer. Scottrade is a member of the Securities Investor Protection Corporation, so should the firm collapse, the money in your account will be safe. Their enhanced SIPC account coverage insures up to $24.5 million per customer, $900,000 of which may be cash. This is similar to the FDIC insurance for US bank accounts. With this insurance, you won’t have to worry about the financial stability of the broker and can concentrate on your trading.

Our Least Favorite Things About This Broker

Fairly Basic Trading Tools.You will have access to real-time streaming quotes and charts. The charting screen lets you choose from more than 20 indicators to analyze price and volume information, and allows you to draw trendlines. You can also use the Stock Screen to screen for stocks according to your selected criteria, ranging from the type of sector/industry, PEG ratio, dividend yield, etc. Also, Scottrade's Stock Screener results are currently limited to common stocks, not for all the stocks available through Scottrade.

Advanced Trading Platform Only Available To Customers Who Have At Least $25,000 In Their Account.ScottradeELITE is Scottrade's advanced online trading platform which downloads to your desktop, and you can fully customize. Some of its features include Trade-Ideas, a real-time advanced screener with more than 260 filters, Backtesting Tool, Nasdaq Velocity & Forces, a real-time tool that monitors for potential surges in trading interest before trades occur, Advanced Charting and more.

How To Open An Account At Scottrade

It takes just 10 minutes for you to open an account online. The application process is easy and very straightforward.

Select the type of account you would like to open.

To create your profile, enter your name, address, date of birth, social security number, and employer’s name and address.

Sign your online application with an electronic signature or print out, sign the application and mail or fax it over.

Fund your account by account transfer, check, wire transfer or ACH.

Our Verdict:

4.60/5 Stars

It is easy to see why Scottrade is one of the top choices of online brokers for stocks in the U.S. It is well-known for its low commissions for stocks as Scottrade customers pay only $7 for stocks priced $1 and above, regardless of how many shares you trade. Scottrade is not a bare-bones discount brokerage firm; it consistently comes up among the top for customer satisfaction in nationwide surveys of brokers, and has 500 branch offices all over the country which frequently hold live seminars for people.

The Scottrade online trading platform is simple to use, and you can get free access to real-time streaming quotes, charts, market news, latest announcements and many more. To use their advanced trading platform ScottradeELITE, you must have at least $25,000 in your account, and that is more geared towards active traders.

You only have to deposit a minimum of $500 in your account to get started, and there are no account inactivity fees or monthly maintenance fees. And if you are thinking of transferring your IRA to Scottrade, you can do so without paying any fees!

In my opinion, Scottrade is a solid online discount broker when it comes to stocks, whether you are a new or experienced trader. Learn more about Scottrade at the official Scottrade website.

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Comments

At GET.com it's all about your saving and getting experience. There's nothing more helpful for all of us Getters than a true life experience, a tip or a trick relating to a reviewed product. Read more about comments.

Stewart Fish

AS A FORMER MEMBER OF THE NYSE, THIS FIRM SUITS ME TO A TEE---NEEDLESS TO SAY, I AM SELF DIRECTED AND DON'T NEED ANY HAND HOLDING

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